Shares of Arm Holdings PLC (NASDAQ:ARM) were trading lower on Thursday, even after the company reported upbeat first-quarter results on Wednesday.

Here are the key analyst insights:

  • Goldman Sachs analyst James Schneider maintained a Sell rating, while raising the price target from $125 to $150.
  • JPMorgan analyst Harlan Sur reaffirmed an Overweight rating, while lifting the price target from $145 to $240.

Check out other analyst stock ratings.

Goldman Sachs: Arm Holdings reported revenues of $1.49 billion, slightly above Street expectations of $1.47 billion, while revenues from its core royalty business of $671 million missed expectations of $700 million, Schneider said in a note. The company's operating margin of 49.1% and operating earnings of 60 cents per share came in above consensus estimates of 47.7% and 59 cents per share, respectively, he added.

Management guided to revenues and earnings slightly higher than Street expectations, reflecting increased demand for the company’s CPU business, the analyst stated. "We believe investor expectations were very elevated heading into the quarter, given recent bullish targets at ARM’s recent investor event, as well as positive market sentiment on the growth prospects for CPUs," he further wrote.

JPMorgan: Arm Holdings' new merchant server CPU chip called AGI had a revenue expectation of $1 billion only six weeks back, Sur said. The demand profile for this has doubled to cross $2 billion in fiscal 2027 and 2028, with management explicitly signaling that the TAM (total addressable market) estimate of more than $100 billion for fiscal 2030 was "undercalled," he added.

The gating factor for the AGI CPU has shifted from whether there is customer demand to how quickly the company can unlock the supply chain, the analyst stated. Management also indicated that Arm's datacenter royalty is on track to growth 100% again in fiscal 2027, he further noted.

ARM Price Action: ARM Holdings shares were down 10.38% at $212.67 at the time of publication on Thursday, according to Benzinga Pro data.

Read Also: Arm Faces Questions Over AI CPU Niche Erosion As Competition From AMD, Intel, Nvidia Heats Up, But CEO Says Nice To See 'Rest Of Market' Catch Up

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